Benchmark stock market indices opened flat on Tuesday as investors weigh geopolitical tensions.
The S&P BSE Sensex added 30.74 points at 81,728.85, while the NSE Nifty50 gained 14.55 points at 25,025.15 as of 9:26 AM.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that there are both headwinds and tailwinds for the market now. Headwinds are coming from the escalation of the geopolitical tensions in the Middle East and Ukraine.
“Brent crude has shot up above $ 81. The strongest tail wind comes from the expected rate cuts by the Fed which will spill over to other central banks including the RBI. The Indian economy now needs monetary stimulus through rate cuts and this is likely in the next policy meeting,” he added.
“If geopolitical tensions cause dips in the market, DIIs and retail investors are likely to buy that dip. Financials, particularly banking and other rate sensitives like housing and automobiles are the likely preferred sectors for institutional buying. Investors can use weakness in the market to buy leading banking stocks and other rate sensitives in these segments. Segments like paints, adhesives and tyres which use crude as inputs will turn weak,” said Vijayakumar.